Non-Renewable Resources Extraction Programs and Markets

Considers the role of economics in discussions about the depletion of finite stocks of natural resources including oil. 1. INTRODUCTION; 2. THE PRICE-TAKING RESOURCE-EXTRACTING FIRM; Introduction; Details of the Resource Extracting Firm; Asset Equilibrium Along Optimal Programs; The Output Constrained Firm and Initial Investments; Solving the Model of the Firm and Comparative Statics; A Production Function for Extraction for the Resource Extracting Firm; Uncertainty in the Future Value of a Parameter; Two Deposits of Uncertain Size Facing the Firm; Varying Quality of Ore in the Model of the Extracting Firm; 3. A RESOURCE EXTRACTION INDUSTRY; Introduction; The Industry in Detail; Exhaustion of Finite Stocks and Society’s Future; Solving the Hotelling Model and Comparative Statics; The Constant Elasticity of Demand (Zero Extraction Cost) Example; The Linear Demand (Constant Extraction Cost) Example; Quality Variation in the Industry Model; Many Certain Deposits with Distinct Constant Extraction Costs; Asset Equilibrium and Two Market Failures; Monopoly Extraction; 4. THE BACKSTOP AND OLIGOPOLY; Introduction; The Backstop Supply and Extraction Programs; Uncertainty in the Date of Arrival of the Backstop; Oligopoly and Extraction Programs; Cournot Oligopoly with n Extracting Firms; A Dominant Seller and a Competitive Fringe; Oligopoly Under Alternative Solution Concepts; Oligopoly With Imperfect Property Rights for Stocks; 5. EXPLORATION AND TAXATION; Introduction; The Firm Exploring Under Certainty; Uncertainty in Exploration by the Firm; Search and Rent Dissipation; Auctions and Resource Tract Sales; Taxation of Exhaustible Resources; 6. ECONOMIC GROWTH AND EXHAUSTIBLE RESOURCES; Introduction; Accumulation of Reproducible Capital (Population and Technology Unchanging); Investing Resource Rents; Population Growth and Technical Progress; Growth Without Extraction Costs (positive population growth with Neutral Technical Change); Growth Accounting with Exhaustible Resources; 7. THEORY AND FACTS (STYLIZED AND OTHERWISE); References; Appendix I: Notes on the Historical Background to Rent on Exhaustible Resources; Appendix II: Economic Depreciation and Asset Equilibrium; Appendix III: Costly Exploration and Extraction; Index;